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February 29, 2000

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Budget 2000-2001 Highlights

BUDGET
2000

Following are the highlights of the Budget 2000-2001.

Strategy:

Strengthening foundations of growth of rural economy.
Modernising traditional industries like textiles, leather, agro-processing and the small scale industry sector.
Harnessing the revolutionary potential of knowledge-based industries like infotech, biotechnology and pharmaceuticals.
Mounting sustained assault on infrastructure bottlenecks in power, roads, telecom, railways, ports and airways.
High priority for human resource development through education, health and other social services.
Strenthening the external sector through high export growth, high foreign investment and prudent debt management.
Establishing a credible framework for fiscal discipline.

Agriculture and rural development: Agriculture gets friendly treatment in Budget 2000

Rural Infrastructure Development Fund VI enhanced from Rs 35 billion to Rs45 billion and interest rates reduced by half per cent.
Credit flow to agriculture through institutional channels to increase to Rs 515 billion in the coming year as compared to the estimated Rs 418 billion this year.
Major thrust to micro-finance for alleviating poverty NABARD/SIDBI to cover 100,000 self-help groups.
A Micro-finance Development Fund of Rs 1 billion to be created in NABARD.
Kisan credit cards coverage to be enlarged from about 5 million to cover additional 7.5 million farmers.
28 ongoing centrally sponsored schemes for agricultural development are to be integrated into one comprehensive programme.
A national commission of land use policy to be set up.
New initiatives for universalisation of elementary education include a new scheme Sarva Shiksha Abhiyan to enable enrolement of all children by 2003.
National literacy mission to be revamped to achieve 75 per cent literacy by 2005.
A new scheme Pradhan Mantri Gramodaya Yojana to be launched for implementation of time-bound programmes for rural people. Rs 50 billion provided for the scheme.

Rural housing and social security to poor:

2.5 million dwelling units to be provided in rural areas.
India Awas Yojana to provide more than 1.2 million houses for the people below poverty line. Rs 15.01 billion provided for this.
Assistance to construct 100,000 houses for families below annual income Rs 32,000.
National Housing Bank to provide refinance for construction of 150,000 houses under Golden Jubilee Rural Housing Finance Scheme.
Rs 1 billion additonal equaity support to HUDCO for building 900,000 houses.
A new group insurance scheme Janashree Bima Yojana to be introduced to provide social security. The insurance cover will be Rs 20,000 in case of natural death, Rs 50,000 in case of accidental death or permanent disability and Rs 25,000 for partial permanent disability.

Population, health and environment

Allocation for reproductive and child health programme to be increased to Rs 10.51 billion from the existing Rs 6.77 billion.
Funds for developing Indian system of medicine and homeopathy doubled to Rs 1 billion.
Programmes for regeneration of mangroves, shelter belts, bamboo forests to preserve rural environment eco-tourism to be encouraged.

Empowerment of women:

Taskforce to review all existing legislation and schemes for enhancing role of women in economy.
Year 2001 declared Women's Empowerment Year.

Other major features of Budget 2000:

-- Fiscal deficit at 5.6 % of GDP.
-- Excise proposals to result in revenue gain of Rs 32.52 billion.
-- Ten per cent income tax surcharge to continue.
-- No changes in personal income tax rates and exemption limit.
-- No change in service tax rates.
-- Bonanza for computer-buyers: Sharp cuts in customs duty rates.
-- Investment in second house eligible for capital gains exemption.
-- A 20 % rebate extended to repayment of housing loans upto Rs 20,000 a year.
-- Tax incentives available for housing sector extended for another two years upto 2003.
-- No income tax on pension and family pension of gallantry award winners.
-- Women tax payers to get an additional tax rebate of Rs 5,000.
-- Tax rebate for senior citizens raised to Rs 15,000 from Rs 10,000.
-- Surcharge on non corporate taxable income over Rs 150,000 raised from ten per cent to 15 per cent.
-- Approval of tax authorities not needed for Voluntary Retirement Schemes or VRS.
-- Hundred per cent deduction for corporate donations for development of sports.
-- Hundred per cent tax deductions for setting up vocational training institutes in rural areas.
-- Tax deductions increased for higher education loans.
-- Govt equity in all non-strategic PSUs to be brought down to 26 per cent and below.
-- Govt eases tax norms for venture capitalists.
-- Govt to 'consider' recapitalisation of weak banks.
-- Access of Indian companies to foreign portfolio investment made more flexible.
-- Tax regime liberalised and SEBI to be made single-point nodal agency for guidelines.
-- Plan outlay for central PSUs in power sector raised from Rs 76.26 billion to Rs 91.94 billion.
-- Progressive corporatisation of public sector service providers in telecommunication, ports and airports.
-- Automatic route for overseas investment by Indian corporates liberalised.
-- Key medical items like oxygen, gloves, etc, exempted from excise.
-- Indian firms to get more flexibility for undertaking capital account transactions especially for acquisitions for business abroad in the knowledge-based sectors.
-- To facilitate development of the government debt market, the legislative framework would be strengthened and modernised through a Government Securities Act which will replace the old Public Debt Act, 1944.

UNI

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